tsconfig.json

{
  "$schema": "https://json.schemastore.org/tsconfig",

  // Override rules for ts-node
  // Via: https://github.com/cypress-io/cypress/issues/26308#issuecomment-1499724602
  // Otherwise breaks with moduleResolution=bundler
  "ts-node": {
    "compilerOptions": {
      "module": "CommonJS",
      "moduleResolution": "node"
    }
  },

  "compilerOptions": {
    "outDir": "dist",

    // Recommended:
    // https://github.com/tsconfig/bases/blob/main/bases/recommended.json
    "strict": true,
    "esModuleInterop": true,
    "skipLibCheck": true,
    "forceConsistentCasingInFileNames": true,

    // Create React App:
    // https://github.com/tsconfig/bases/blob/main/bases/create-react-app.json
    "module": "esnext",
    "allowJs": true,

    // To provide backwards compatibility, Node.js allows you to import most CommonJS packages with a default import.
    // This flag tells TypeScript that it's okay to use import on CommonJS modules.
    "allowSyntheticDefaultImports": true,
    "isolatedModules": true,
    "jsx": "react-jsx",

    // The new `bundler` value support package.json `exports` and is still tolerant
    // regarding most conventions used in frontend code.
    "moduleResolution": "bundler",

    // Sindre Sorhus
    // https://github.com/sindresorhus/tsconfig
    "target": "ES2021", // Node.js 16, https://github.com/microsoft/TypeScript/wiki/Node-Target-Mapping
    "lib": ["dom", "dom.iterable", "ES2021"],
    "resolveJsonModule": false, // ESM doesn't yet support JSON modules.
    "declaration": true,
    "pretty": true,
    "newLine": "lf"
  }
}